RESOLUTION AUTHORIZING EXECUTION OF AN AGREEMENT IN THE AGGREGATE AMOUNT OF $313,832,000 WITH ANSALDOBREDA S.P.A. FOR NEW HEAVY RAIL VEHICLES; AUTHORIZING THE COUNTY MAYOR OR COUNTY MAYOR’S DESIGNEE TO EXECUTE THE CONTRACT FOR AND ON BEHALF OF MIAMI-DADE COUNTY AND TO EXERCISE ANY CANCELLATION AND RENEWAL PROVISIONS; TO EXERCISE ALL OTHER RIGHTS CONTAINED THEREIN; AND AUTHORIZING THE USE OF CHARTER COUNTY TRANSPORTATION SURTAX FUNDS

Indexes:

NONE

Sponsors:

NONE

Sunset Provision:
No

Effective Date:

Expiration Date:

Registered Lobbyist:

None Listed

Legislative History

Acting Body

Date

Agenda Item

Action

Sent To

Due Date

Returned

Pass/Fail

Board of County Commissioners

11/8/2012

8N1

Adopted

P

REPORT:

Pursuant to the advice of Assistant County Attorney Bruce Libhaber, it was moved by Commissioner Moss that the Board direct the Mayor or his designee to conduct a feasibility study to determine the feasibility of modifying the design of the transit vehicles to build a slope nose vehicle to include the cost effectiveness of that modification in design and that the findings of the feasibility study be brought back before the Board. This motion was seconded by Commissioner Jordan; and upon being put to a vote, the motion passed by a vote of 13-0.
Chairman Martinez commented he opposed the approval of the foregoing resolution because it was a $5 million contract, which lacked local preference and would ship jobs overseas; and it would impact our economy.
In response to Commissioner Sosa’s questions, Miami-Dade Transit Director Ysela Llort advised that the vehicles would be assembled in the United States as required by the “Buy America” provisions; and the construction of the test track had been recommended many years ago. She advised that, regardless of who was awarded this contract, the test track needed to be built; or it would require the curtailment of service to accommodate the testing activities at a time when the Airport Station was built.
Commissioner Sosa reiterated both vendors were based overseas, Italy and Spain; but the final assembly of the vehicles would be done in the United States.
Following a brief discussion on the cost of the contract, Commissioner Sosa suggested that other users could be allowed in the future to use the test tracks to increase revenues.
Miami-Dade Transit Director Llort advised the contract included provisions to ensure nothing else beyond the written recommendations happened; and the recommended vendor had submitted a bid proposal $4.6 million lower.
In response to Chairman Martinez’s question regarding the number of rail systems in the country with test tracks, Ms. Llort advised the test track was recommended for construction approximately 20 years ago.
Pursuant to Commissioner Jordan’s questions, Miami-Dade Transit Director Llort advised the rail operations would have to be shutdown to test the rail vehicles; and the department would only have approximately three hours available to perform maintenance of tracks and vehicles and to test vehicles. She noted that the department also had to ensure the tracks were completely clear and clean prior to reopening service. She stated that the rail system closed at midnight, but it took approximately one hour to clear the vehicles from the tracks.
Commissioner Jordan stated the construction of the test track and its additional cost were justified.
Chairman Martinez commented this contract would increase the County’s debt. He noted the County collected approximately $205 million from the PPP and spent approximately $198 million on the rail system, which would result in a shortfall of $7 million.
Commissioner Suarez commented he agreed with Chairman Martinez’s comments, and he was not totally convinced on the idea that the test track was needed. He stated that, in his opinion, the existing rail tracks could used to test the vehicles.
Chairman Martinez commented the expenditures would surpass the revenues according to the figures provided by the Office of Management and Budget.
Commissioner Bell commented she took a tour of the Metrorail facility and the test track was needed.
Commissioner Barreiro commented that the test track was needed, and he did not wish to have the cars built by a contractor without experience. He also commented that it had been stressed out to him that the international users of Miami International Airport wished to use mass transportation to and from the Airport. Therefore, Metrorail operating hours should be expanded to accommodate the Airport hours.
Commissioner Moss commented he had also taken the tour of the Metrorail facility and the test track was needed.
Commissioner Diaz commented he would support this issue, but he expressed concerns for the project cost of $25 million.
Upon conclusion of the foregoing discussion, the Board proceeded to vote on the foregoing resolution.

Regional Transportation Committee

10/15/2012

3K

Forwarded to BCC with a favorable recommendation

P

REPORT:

Assistant County Attorney Bruce Libhaber read the foregoing proposed resolution into the record.
Assistant County Attorney Libhaber noted the foregoing is an award recommendation by the County Mayor, and the process involved a previous recommendation by a former County Manager that became the subject of a bid protest filed by CAF USA, Inc. (CAF), the unsuccessful bidder. He also noted the former Manager’s recommendation was affirmed by the hearing examiner in a bid protest, but CAF appealed the decision and the Federal Transit Authority (FTA) reversed it. He further noted that in November 2011, the FTA’s Chief Counsel, Dorval R. Carter, Jr, concluded in his decision that this procurement was currently ineligible to receive federal funding, and recommended that in order to regain eligibility for federal funding, Miami-Dade Transit re-evaluate the proposers’ Best and Final Offers (BAFO) without consideration of local preference, the effect of a local assembly facility on the local economy or the potential project cost savings, based upon the location of the final assembly facility. Mr. Libhaber noted Mr. Carter’s recommendation was presented to the Selection and Evaluation Committee. Similarly, he noted the commissioners must not consider local preference, the effect of a local assembly facility on the local economy or the potential project cost savings, based upon the location of the final assembly facility, in its deliberations, discussions or its votes as it relates to the purchase of new Metrorail vehicles.
It was moved by Commissioner Heyman that the foregoing proposed resolution be forwarded to the County Commission with a favorable recommendation. This motion was seconded by Commissioner Moss for a discussion.
Chairman Barreiro allowed the following persons to make a presentation on the foregoing proposed resolution:
1) Mr. Miguel DeGrandy, 800 Douglas Road, Attorney representing CAF USA, appeared and expressed appreciation to Chairman Barreiro and the Committee for allowing him to make this presentation. He noted, on many occasions, the Commission complained about not receiving complete or accurate information prior to deciding an important contract, and about receiving pertinent information only after the contract was signed. He noted his intent was to provide all the facts at the outset so that the Commission could make an informed decision. Mr. DeGrandy noted this procurement process was the longest on record, beginning in 2004 and languishing for more than 25 percent of the lifecycle of the existing Metrorail trains, but it was not a well-run process. He noted the foregoing recommendation was the result of a 2-1 split decision of the Selection Committee, and the one member who voted to recommend CAF USA was the County’s former Rail Director. He respectfully requested the commissioners exercise their independent judgment in determining which company constituted the best value.
Mr. DeGrandy explained that in his presentation, he would cover the history of this procurement, the flawed evaluation process, and the concept of best value. He noted, in 2003, the County retained a consulting firm for $2.1 million to develop specifications for a rail vehicle rehabilitation project, and in 2005, awarded the same firm $15 million in a supplemental agreement, but discarded the entire procurement in 2007. He noted the County proceeded to hire the same consultant firm to draft specifications for the purchase of new heavy rail vehicles and manage the new procurement process, at a cost of several million dollars; however, the process was fatally flawed, resulting in violations of the FTA regulation, and the FTA’s favorable ruling of CAF USA’s appeal. He said that rather than develop a new evaluation methodology or empanel a new committee, the County empanelled the same selection and evaluation committee, guided by the same consultants and made a faulty recommendation in the first process, to review this process. Mr. DeGrandy pointed out an item approved on today’s agenda to hire the same consultant firm for $4.4 million to manage the construction phase of the project, which meant the original $2.1 million contract would increase ten fold. He noted in December 2011, the selection committee reconvened and rather than conduct a detailed analysis, two of the three members focused on price only. However, he noted this was not a bid for lowest price, but a subjective determination for an award based on best value. He pointed out that price was only one component of the award, and that the RFP required consideration of various qualitative factors, including technical design, approach, quality of personnel, management plan, and risk to the County.
Mr. DeGrandy noted on two occasions and as late as October 8, 2010, CAF USA offered in writing to match the recommended price; however, price was not a determining factor, but a distraction in the process, and could be negotiated once a determination was made for best value. He suggested that best value be determined independent of price, based on qualitative factors such as a superior propulsion system, best performance record and less risk. Mr. DeGrandy pointed out that AnsaldoBreda’s proposal would no doubt be more expensive than CAF’s proposal because it involved constant travel to Italy, travel costs for personnel, and costs for consultants and quality control. He said the County’s former Rail Director, who was the one member of the Selection and Evaluation Committee who voted favorably for CAF, based his recommendation on other such factors as the company’s capabilities, risk, performance records and ownership of a physical plant and a test track. Mr. DeGrandy indicated that according to the Selection and Evaluation Committee’s transcript, CAF undeniably ranked first and was deemed the best value based on qualitative factors. He also noted that all three Selection and Evaluation Committee members believed that CAF had a superior Mitsubishi propulsion system and posed less risk.
Mr. DeGrandy noted CAF proposed to assemble the trains at one facility in Elmira, New York, using American workers, while AnsaldoBreda proposed to construct all car shells in Italy, assemble the first six trains in Pittsburg, California, and ship them elsewhere for testing before final delivery to Miami. AnsaldoBreda also proposed to transport the remaining 130 car shells from Italy to Miami for final assembly in an unknown facility that had not yet been built. He said that regardless of the proposer, the trains had to undergo certain dynamic testing before final delivery; however, AnsaldoBreda did not own a test track in the United States (USA) and would not be allowed to use the new Lehman Center test track approved today. Therefore, the component of shipping trains back and forth from one place to another for assembling and testing, before final delivery to Miami, would create greater risk to the County. In contrast, Mr. DeGrandy noted CAF proposed to assemble all the trains in one facility and test them on its own test track that it invested millions of dollars to develop. He stressed that this was why the former Director of Rails Richard Snedden voted in favor of CAF’s proposal and emphasized that AnsaldoBreda posed a higher risk. He read into the record, statements by Richard Snedden, who was an authority on the subject and gave very wise advice.
Mr. DeGrandy noted CAF’s history of producing cars on time, on budget and to the satisfaction of its customers had been consistent, while AnsaldoBreda has had problems in contracts with USA cities such as Boston, Los Angeles and New York; and paid more in liquidated damages in one contract with Denmark than what it was worth. He pointed out that AnsaldoBreda is an Italian Company owned by Finmeccanica, which is partly owned by Italy’s government. He also noted it was reported in the Wall Street Journal and other news journals that Finmeccanica was undergoing a major restructure and trying to eliminate AnsaldoBreda because it was consistently losing money. He pointed out that even Finmeccanica’s own press releases stated that its ratings had been downgraded as a direct result of AnsaldoBreda’s poor performance. Mr. DeGrandy noted the Mayors’ recommendation was the result of a long, flawed procurement process, and at every stage, the County’s consultants advised that everything was fine, and continued to collect millions in taxpayers’ dollars, but the FTA ruled that the procurement violated federal law. He pointed out one of the greatest flaws in this procurement was not separating the consultants in the procurement process from the consultants managing the contract’s performance, which meant the consultants had a vested interest in the outcome of this process.
In conclusion, Mr. DeGrandy reiterated that price was not a determining factor, but a distraction in the process; that AnsaldoBreda’s proposal cost more in consultant fees, quality control, and travel costs for personnel to travel around the world; and that CAF USA rated higher on technical and qualitative factors and its performance history was much more reliable than AnsaldoBreda’s. He respectfully suggested that the Board discard the advice of the County consultants and consider the advice of its former Rail Services Director, Mr. Snedden, who recommended CAF’s proposal as the best value.
2) Mr. Al Dotson, 1450 Brickell Avenue, Attorney representing AnsaldoBreda, credited Mr. DeGrandy for providing a good explanation on the RFP criteria and the design, but said he would debunk a few of his arguments. First, he noted Mr. DeGrandy indicated that CAF proposed to assemble everything in one location; however, in its response to the RFP, CAF identified several locations in which it would assemble the trains, including Spain, Brazil and Elmira. Mr. Dotson pointed out that CAF had never manufactured or assembled everything in Elmira and only stated it would in its recent Best and Final Offer (BAFO). Second, he indicated that this process included a recommendation, a hearing examiner’s decision, a FTA review and a decision by another evaluation committee, but CAF offered to reduce its price only after the BAFO was reviewed, and the examiner said that was not permitted as a matter of law. He noted allowing the bidders to later match a price after giving their BAFOs was not permitted by the RFP or the law. He also noted the FTA advised the County that it would run the risk of forfeiting federal dollars if it failed to follow the RFP. He stressed that only one BAFO was permitted in this process, not two and not after the other proposer’s price was revealed. Third, Mr. Dotson pointed out that in the original RFP for the train rehabilitation project in 2006, Mr. DeGrandy issued a letter stating that the County could not allow any bidder to change its price after the BAFO was unveiled. Mr. Dotson noted, in that particular RFP, two BAFOs were expressly allowed, but not in the present BAFO. He said the FTA, while quoting CAF in a ruling connected with a procurement process in Houston, concluded that it was not permissible to allow a change in the price, once the BAFOs had been disclosed.
Mr. Dotson noted Mr. DeGrandy mentioned problems with AnsaldoBreda’s history of performance in connection with certain projects, but failed to mention that in its response to an RFP in Houston, CAF said it would comply with the Buy American Act standards, but once selected, asked for a waiver from the FTA and was denied. He noted CAF cost Houston more than $4.5 million per light-rail vehicle in that procurement, or twice the amount of the price cap in this procurement process. Mr. Dotson said that Mr. DeGrandy was correct when he mentioned articles reporting issues with AnsaldoBreda’s contract with Los Angeles; however, Mr. DeGrandy failed to mention that LA’s reliability testing showed AnsaldoBreda’s heavy-rail vehicles were the most reliable in LA’s fleet, and its light-rail vehicles were the second most reliable. Mr. Dotson also pointed out that Mr. DeGrandy failed to mention that the Metropolitan Boston Transit Authority declared that AnsaldoBreda’s project was a success. Mr. Dotson noted every company has had issues from time to time, but AnsaldoBreda’s performance records showed that it delivered on its promises and provided reliable vehicles. Mr. Dotson displayed photos comparing CAF’s proposed vehicles and AnsaldoBreda’s proposals with the existing rail vehicles, and noted the state-of-the-art vehicles proposed by Ansaldobreda were incomparable.
In addition, Mr. Dotson noted Section 2-8.4 of the County’s Bid Protest Ordinance states that a bidder must file a bid protest to challenge an RFP process or waive its right to protest the bid. He said that today’s (10/15) proceedings were normally conducted before a hearing examiner in a bid protest, but Mr. DeGrandy failed to mention that CAF did not file a bid protest in this case. More importantly, the ordinance provides that if a bidder disagrees with the RFP requirements, and failed to raise those issues within 48 hours of opening the bids or presenting the proposals, then the bidder waived the right to present those arguments. Mr. Dotson pointed out that a second BAFO was not required in this RFP process, and all these arguments could have been presented before a judge in a bid protest, but CAF failed to raise them or file a complaint in a timely manner; therefore, it waived those arguments. He noted the FTA heard the exact arguments presented today and did not throw out the entire process, but responded to one particular component in an extensive process, and took no action on the rest. He also stressed that the evaluation committee reviewed the RFP process again and twice, found AnsaldoBreda’s proposal to be the most valuable. Mr. Dotson pointed out that CAF currently did not have a Buy American certification showing that its scheme in Miami-Dade County actually met the Buy American requirements. He said that it took the FTA 13 months to respond to the County in connection with the Buy American Compliance; therefore, if CAF was awarded this contract, it would take the FTA at least another 13 months to respond again on compliance with the Buy American Act. Furthermore, the FTA may rule that the County violated the RFP process because the RFP did not authorize two BAFOs, which could result in additional delays in the project and potentially forfeit the federal funding.
Finally, Mr. Dotson addressed the argument about the test track. He noted an item for rehabilitation of the Lehman Center and a test track was passed today without discussion. He said that it was important for the commissioners to understand that the test track item consisted of five storage tracks, two maintenance tracks, an inspection building, a sliding track, a test track, a train control and communication house. Mr. Dotson pointed out that what the Committee members had just approved today had more to do with the operations of Miami-Dade Transit than with this particular procurement, and had a 100-year life expectancy, which meant the facility could be used for the next seven rehabilitations and purchases of new cars. Regarding the test track itself, Mr. Dotson indicated that certain tests required accelerated speeds of up to 70 mph, and the test track in Elmira only allowed for speeds up to 35 to 45 mph or at best 55 mph with some changes, which meant that some, but not all tests could be performed there. He noted although the Lehman Center was not critical for this procurement, it was necessary and would serve MDC for the next 100 years. Mr. Dotson introduced Mr. Giancarlo Fantappie, President/CEO of AnsaldoBreda, Inc, to answer any questions.
Commissioner Heyman noted she appreciated the Assistant County Attorney qualifying the parameters of the discussion as it related to local preference, but she failed to see the relevance since the proposing firms were either from Spain or Italy, and neither had a strong, local holding in the County or Florida. She asked if it was correct that a bid protest was not filed in this process, noting she reviewed all the documents and saw nothing to indicate that a bid protest was filed.
Assistant County Attorney Libhaber noted the recommendation presented by the County Mayor was not protested.
Commissioner Heyman pointed out that today’s (10/15) meeting was not the venue for presenting arguments challenging the RPF requirements, but the issue should have been addressed before a hearing examiner in a bid protest.
Assistant County Attorney Libhaber noted that was correct; however, today’s presentation was permitted at the discretion of the Committee’s Chairperson.
Commissioner Heyman noted she appreciated the suggestion that the Commission should exercise its independent judgment, but clarified that they were prohibited by Charter and the Cone of Silence from delving into the substantive issues of the procurement process, and could not address any bids, RFPs, or RFQs, until after the Mayor’s recommendation was presented. She expressed concern that the process was long and involved two recommendations. She asked if any drastic changes were made to the County Mayor’s recommendation from the recommendation previously made by the former Manager that should be noted on the record.
Ms. Ysela Llort, Director, Miami-Dade Transit, noted the only difference in the two processes was the adherence to the FTA instructions, which was already addressed. Responding further to Commissioner Heyman’s concerns, Ms. Llort affirmed that nothing was changed in the recommendation other than the FTA instructions. She noted both proposers were good manufacturing companies and offered good products, but only one was cheaper.
Commissioner Heyman asked if every requirement of the RFP was considered by the Selection Committee in its deliberations, including requirements for a foreign company doing legal business with the USA.
Ms. Llort affirmed that the Selection Committee evaluated all proposals, as well as the Buy American Act requirements.
In response to Commissioner Heyman’s questions regarding who would be liable for the delays in this contract, and would the awardee be responsible for any delays in shipping the trains, Ms. Llort noted the contract contained provisions to address any delays, as well as any issues with production management, liquidated damages, the performance bond payments and hold backs.
In response to Commissioner Heyman’s question regarding whether the awardee would be held accountable for all possible delays incurred, including the costs, Ms. Llort noted that was correct, as well as the contract management provisions.
In response to Commissioner Heyman’s question whether the bid amount included travel costs to travel to all the mentioned geographical locations, Ms. Llort noted the bid included some travel costs, and the current budget included the travel costs to be incurred by MDT personnel, which were comparable for both companies.
In response to Commissioner Heyman’s question whether the Selection Committee reviewed the proposed designs depicted in the pictures displayed by counsel today, Ms. Llort noted yes, and the Committee evaluated all of the component parts of the proposed trains.
In response to Commissioner Heyman’s question regarding whether it was correct that Miami currently had no test track to test the proposed trains on, Ms. Llort noted that was correct.
Following Commissioner Heyman’s comment that final assembly would be done in Miami by local employees, which was an issue the Committee could not consider, Assistant County Attorney Libhaber cautioned the Committee about this line of questioning and noted the issue should not be deliberated because the Cone of Silence was still in effect.
Ms. Llort added that the Buy American provisions only required that the final assembly be done in the United States.
Commissioner Heyman referenced a publication indicating that CAF USA was working with AnsaldoBreda in a consortium on a major international project, and the recommended awardee in that contract was AnsaldoBreda; but CAF was objecting to AnsaldoBreda being awarded in the foregoing contract, citing how problematic the company was. She asked if the Selection Committee considered the performance histories of both proposing companies, and did these companies have any pending violations.
Ms. Llort noted the Selection Committee reviewed the performance histories and the post responsibility reviews of both companies. She stated this was a very long process.
Commissioner Heyman asked Ms. Llort to state on the record, the length and various stages of this process, for the benefit of those Commissioners who were not in office when it began.
Ms. Llort noted this process involved extensive responsibility reviews and numerous response letters to the opposing counsel, and said that every issue was addressed.
Deputy Mayor Alina Hudak pointed out it was important to note that the responsibility reviews were done by the Internal Services Department (ISD), independently of Miami-Dade Transit.
Mr. Lester Sola, ISD Director, noted the Selection Committee considered the responsibility reviews, but the ISD’s involvement was to respond to the counsel’s letters throughout the entire process. He said he believed the review was met.
Commissioner Heyman noted the difference in the two BAFOs was minor, considering a long and arduous process with three levels, two recommendations by two different administrations, the FTA opinions, the arguments by opposing counsels, and the Department’s support of the Mayor’s recommendation. She asked if anything else needed to be added to the record.
Ms. Llort said no, she did not believe so.
Commissioner Suarez commented on the FTA rulings and sunshine laws prohibiting the Committee from discussing local preferences, yet the Committee was able to consider the Buy American provisions requiring 60 percent of the parts and final assembly be done in America. He said the issue with the test track was confusing since an item was approved today for rehabilitation of the Lehman Center and a new test track, but AnsaldoBreda would not be able to use it. He noted the irony of supporting the Mayor’s recommendation was that it would endorse a long, flawed and tortuous process. He said that had the process been a competitive bid with a sealed price, the contract would be awarded to AnsaldoBreda, based on the lowest price; however, he was inclined to support CAF USA based on Mr. DeGrandy’s compelling argument that the Board should determine best value, based on the best propulsion system, the company’s past performance and financial soundness.
Commissioner Suarez asked for an explanation of the performance bond requirements. He said the approximate 2% payment of the contract price until final delivery and acceptance of the vehicles was not much of a guarantee. He also noted the sliding scale payments for the performance bond should be reversed so that the highest payment is made in the beginning, rather than the lowest payment. He questioned the 3% retainage fee for liquidated damages until the five year warranty expired; and the term “married pair” which should be matching or complimentary pairs or something other than married pairs.
Ms. Llort noted the reason for the term “married pair” was the vehicles had complimentary parts, and were intended to always operate as a pair.
Commissioner Suarez pointed out it was alleged that AnsaldoBreda had financial troubles and was backed by Italy's Government, which incidentally did not have a good bond rating now; however, he could not imagine that this company would allow a lapse in a $3 million contract and strain its credibility further. Commissioner Suarez said this was a tough call and had the process been done correctly, he would be inclined to support the Mayor’s recommendation since AnsaldoBreda had the lowest price; however, CAF USA would win, based on subjective factors. He said he still had concerns regarding AnsaldoBreda’s troubling performance history and he was not convinced that the performance bond requirements were sufficient.
Ms. Llort explained the reason for a lesser performance bond payment in the beginning was because this project included design, construction and delivery of the train vehicles, and the first part of it primarily involved design and preconstruction activities. She clarified that this was a big contract and the processes included a sealed BAFO that was opened, and led to a lower price. She said this process was one of the best she had ever seen, in terms of due process, and all procedural aspects were addressed.
Deputy Mayor Alina Hudak noted it was important to correct the record regarding comments made earlier that this was a lengthy and flawed process. She said this was a very clean process, which began in March 2009 and ended in February 2011, and the delays were attributed to the bid protest filed by the opposing proposer. She also said this process involved multiple reviews by different independent agencies in support of the recommendation, and she believed it was a very professional and comprehensive process with tremendous support from technical experts from multiple county agencies. Regarding the award methodology, Ms. Hudak noted the RFP was well defined with specific point allocations for technical proposal, commercial, price and an option price.
In response to Commissioner Suarez question whether the original manufacturer of the existing rail cars was considered or allowed to bid in this process. He also asked about the name of that company, and whether it been bought out by one of the proposing companies.
Ms. Llort noted all qualifying companies were allowed to bid, and she believed the original company no longer produced rail cars. She also noted that three bids were received, and one was disqualified because it exceeded the ceiling price set in this RFP.
Assistant County Attorney Libhaber added that the original company’s name was Budd Company, and it was bought out by another company.
In response to Commissioner Edmonson’s question regarding when this process began and did it end in a BAFO, Ms. Llort noted that was correct and the entire process, including the RFP for rehabilitation of the train vehicles, began in 2004.
In response to Commissioner Edmonson’s question regarding how much longer would it take to complete the process, if the bids were thrown out, and the process started over again, Deputy Mayor Hudak clarified that it would take about 2 to 3 years to complete the process, if all bids were thrown out and the process started over again, but if the Board directed the Administration to negotiate with CAF USA, then the timeframe would be linked to the negotiating process.
Commissioner Edmonson commended the counsels of both proposing companies, noting Mr. DeGrandy and Mr. Dotson were two of the finest attorneys in the County. She said she would like to see an end to this process and the contract finalized. She asked if the FTA would withhold federal funding from the County if the Administration went back and renegotiated the BAFO.
Assistant County Attorney Libhaber noted although he could not dictate the actions of the FTA, he believed it would be problematic for the County if the Administration went back to the FTA and advise that they deviated from the RFP requirements to renegotiate the BAFO, since the RFP specifications did not contemplate a second BAFO or allow for a change in the price, after the fact.
In response to Commissioner Edmonson’s question whether further negotiations of the BAFO would constitute a violation of Florida Law or the FTA regulations, Assistant County Attorney Libhaber noted that mechanisms exist for negotiating or waiving a competitive bid that were consistent with Florida law and would not be a violation; however, negotiating the BAFO would be inconsistent with the FTA regulations and could cause the County to forfeit federal funding for this project.
Commissioner Edmonson noted she did not want to see the Department go down that road again.
Commissioner Moss agreed with Commissioner Edmonson’s comments that both companies were represented by fine attorneys. Regarding the test track, he asked if it was correct that regardless of which company was awarded, the awardee would be responsible for testing the rail cars on their own track until final delivery, and the County would be responsible for testing the trains once they were delivered.
Ms. Llort noted that was correct. She explained that final testing would have to occur either on the County’s new test track or its existing Rail system for final acceptance. She explained further that the existing rail cars were currently tested on the existing track until the new track was built and became available.
Commissioner Moss noted it was very important to him that the vehicle design be considered in the final negotiations. He asked about the models shown in the book compared to the models demonstrated in today’s presentation, and asked what the difference was in the two designs, noting one looked more futuristic and had a sleeker nose cap.
Ms. Llort explained that the rail cars were linked as married pairs, and the front car would not be interchangeable if it had a sloped nose, making it very difficult to connect or move the cars from one to another. She noted the design in the book was just a different system than the one proposed.
Commissioner Moss noted he would continue to pursue the issue of having a more futuristic design for the County's rail cars and transit system, since the goal was to make Miami a world class city.
Ms. Llort said she would be glad to arrange a meeting between any commissioner and the engineers to discuss further the choices in the designs and the mechanisms.
Commissioner Moss noted that based on his knowledge of the County Mayor, who was a stickler for details, he believed that after a long, arduous process, the Mayor considered all of the issues and was satisfied they were addressed, before making his recommendation. He said he would support the Mayor’s recommendation, even though he still had some concerns and reservations. Commissioner Moss said he wanted the best looking trains and most efficient transit system for this community, and expected the Administration to stay on top of the issues raised in this procurement.
In response to Chairman Barreiro’s request for clarification regarding the married pair vehicles and whether they were interchangeable, Ms. Llort noted yes, but explained that each pair consisted of an “A” and “B” car that interchanged with other “A” and “B” cars.
Chairman Barreiro noted price was definitely an issue in a procurement of this magnitude, because the County was trying to draw down federal dollars, and could end up forfeiting the funding and paying full cost of the project. He also noted the contract for Transit's fare cards was different because it involved local dollars only and permitted more than two Best and Final Offers (BASOs). Chairman Barreiro pointed out that both prospers were world-known companies and each had some issues along the way, but only a handful of companies exist like the two, which produced trains and did so much for the economy.
Hearing no further questions or comments, the Committee proceeded to vote on the foregoing proposed resolution as presented.

County Attorney

9/12/2012

Assigned

Bruce Libhaber

9/13/2012

County Mayor

9/11/2012

Assigned

County Attorney

11/8/2012

REPORT:

MDT (ASST. COUNTY ATTY: BRUCE LIBHABER) (NO BCC SPONSOR) (PENDING CMTE ASSIGNMENT) (PLEASE DO NOT MAKE A COPY OF THE ATTACHMENT FOR DUPLICATION)

County Mayor

9/11/2012

Assigned

Alina Tejeda-Hudak

10/1/2012

9/11/2012

Legislative Text

TITLE

RESOLUTION AUTHORIZING EXECUTION OF AN AGREEMENT IN THE AGGREGATE AMOUNT OF $313,832,000 WITH ANSALDOBREDA S.P.A. FOR NEW HEAVY RAIL VEHICLES; AUTHORIZING THE COUNTY MAYOR OR COUNTY MAYOR’S DESIGNEE TO EXECUTE THE CONTRACT FOR AND ON BEHALF OF MIAMI-DADE COUNTY AND TO EXERCISE ANY CANCELLATION AND RENEWAL PROVISIONS; TO EXERCISE ALL OTHER RIGHTS CONTAINED THEREIN; AND AUTHORIZING THE USE OF CHARTER COUNTY TRANSPORTATION SURTAX FUNDS

BODY

WHEREAS, this Board desires to accomplish the purposes outlined in the accompanying memorandum, a copy of which is incorporated herein by reference,

NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF MIAMI-DADE COUNTY, FLORIDA, that this Board approves the execution of an agreement in the aggregate amount of $313,832,000 with AnsaldoBreda S.p.A. in substantially the form attached hereto and made a part hereof, and authorizes the County Mayor or County Mayor’s designee to execute same for and on behalf of Miami-Dade County and to exercise cancellation and renewal provisions, and any other rights contained therein, and authorizes the use of Charter County Transportation Surtax Funds.

Subject:
Recommendation for Approval to Award: New Heavy Rail Vehicles

STAFF RECOMMENDATION

RECOMMENDATION

It is recommended that the Board of County Commissioners (Board) approve award of this contract to AnsaldoBreda S.p.A (AnsaldoBreda) for purchase of 136 new heavy rail replacement vehicles and the decommissioning of the existing Metrorail fleet. The vehicles will be designed and built by AnsaldoBreda to provide 30 years of useful life to the County. The contract is compliant with the commercial, and technical requirements of the Request for Proposals (RFP), and all the applicable federal requirements.

This contract award recommendation is placed for Committee review pursuant to Miami-Dade County Code Section 29-124(f). This contract award recommendation may only be considered by the Board if the Citizens’ Independent Transportation Trust (CITT) has forwarded a recommendation to the Board prior to the date scheduled for Board consideration or forty-five (45) days have elapsed since the filing with the Clerk of the Board of this contract award recommendation. If the CITT has not forwarded a recommendation and forty-five (45) days have not elapsed since the filing of this award recommendation, I will request a withdrawal of this item.

CONTRACT NO: Contract No. 654

CONTRACT TITLE: Purchase of 136 New Heavy Rail Vehicles

DESCRIPTION: Purchase of 136 new Heavy Rail Vehicles (HRV) inclusive of spare parts, staff training, training simulator, vehicle testing and test equipment, technical and training manuals and drawings. The Contractor shall furnish all bonds and insurances, labor, materials, tools, equipment, transportation and supervision, and shall perform all design, engineering, systems integration, manufacturing, testing, repairs, retrofits, and provide technical support necessary to perform the work. The Contractor will decommission the existing fleet of vehicles in accordance with all federal, state, and local regulations.

TERM: Ten years and seven months inclusive of a five-year warranty period per vehicle.

Note: The RFP required a base vehicle warranty of three years. The County negotiated a five-year base vehicle warranty at no additional cost. Notice to Proceed (NTP) is anticipated in the fourth quarter of 2012 with a scheduled delivery and acceptance rate of six vehicles per month starting the second quarter of 2015. The final six vehicles are scheduled to be delivered and accepted during the last quarter of 2017.

APPROVAL TO ADVERTISE: March 31, 2009

CONTRACT AMOUNT: $313,832,000, inclusive of a 5% contingency allowance. The contract amount is based on the negotiated price of $298,887,200, plus $14,944,800 for the contingency.

PREVIOUS CONTRACT
AMOUNT: $83,808,368 in 1979, through a joint purchase with Baltimore, Maryland for the existing fleet.

The allocation and funding source have been reviewed and approved by the Office of Management and Budget. There is no fiscal impact beyond what is stated in this recommendation.

The procurement process was conducted in accordance with all Federal Transit Administration (FTA) requirements and guidelines. A Letter of No Prejudice (LONP) for $300 million, that is valid until November 19, 2014, has been received from the FTA. The LONP allows the County to apply for federal funding after contract award.

The total required funding for the Project, including this contract, project management, oversight and other support costs is $375,746,000. This amount is $25,705,000 less than the not to exceed ceiling of $401,451,000 for total project costs approved by the Board through Resolution R-488-08 on May 6, 2008. The $375,746,000 will be funded through the issuance of Transit System Sales Surtax Revenue Bonds. Net Transit System Sales Surtax revenues will be the sole pledge for repayment of the Bonds. The Bond Ordinance and corresponding Series Resolution authorizing the Bonds was approved by the Board on June 5, 2012.

This project funding request includes engineering services to be provided under an existing consultant services contract with Washington Infrastructure Services, Inc. (WIS). The existing contract (No. TA02-MR26) will require an extension of the term, and an increase in funding of approximately $4.4 million (included in the project funds of $375,746,000 above) and is being presented as a separate agenda item.

SENIOR PROCUREMENT
CONTRACTING OFFICER: Fred Simmons, Jr.

METHOD OF AWARD: To the recommended responsive, responsible vendor based on the evaluation criteria established in the solicitation. A full and open competitive Request for Proposals process was used. The vendor whose offer was determined to represent best value, and most advantageous to the County, is recommended for award.

VENDOR RECOMMENDED
FOR AWARD:

Vendor
Address
Principal
AnsaldoBreda S.p.A.
Via Argine N. 425
Maurizio Manfellotto
Naples, Italy 80147
VENDORS NOT
RECOMMENDED
FOR AWARD: Alstom Transportation Inc.: Found non-responsive by the County Attorney’s Office as their proposal did not meet the County’s “not to exceed per vehicle” price cap of $2.419 million per vehicle.

CAF USA, Inc.: Was not recommended by the Negotiations Team as their offer did not provide the best value to the County.

PERFORMANCE DATA: Please refer to the Responsibility Review section of this memorandum.

COMPLIANCE DATA : There are no compliance issues with the recommended firm.

CONTRACT MEASURES: The Review Committee of April 1, 2009 determined that no measures would be applied due to the inclusion of federal provisions in the solicitation.

LIVING WAGE: The services being provided are not covered under the Living Wage Ordinance.

USER ACCESS PROGRAM: The User Access Program provision is not included.

INSPECTOR GENERAL FEE: The Inspector General fee does not apply.

LOCAL PREFERENCE: The Local Preference Ordinance does not apply.

ESTIMATED CONTRACT
COMMENCEMENT DATE: Ten days after date adopted by the Board of County Commissioners, unless vetoed by Mayor.

DELEGATED AUTHORITY: If this item is approved, the County Mayor or designee will have the authority to exercise, at their discretion, contract modifications, subsequent options-to-renew and other extensions in accordance with the terms and conditions of the contract.

The selection process included negotiations and consideration of a Best and Final Offer (BAFO) process with the top ranked proposer resulting in a final price offer of $274,495,000, or $2.018 million per vehicle. A careful review of the negotiations results was conducted, along with a thorough assessment of the rail industry marketplace, evaluation of MDT’s existing rail service performance, and future requirements for rail vehicles, including planned Metrorail extensions, and a life cycle cost analysis to ascertain whether it was more cost effective to rehabilitate or purchase new replacement vehicles. The results of these analyses, detailed in a memorandum to the Board on September 27, 2007, resulted in the Board’s approval on March 18, 2008 to reject all bids for RFP 439. Subsequently, on May 6, 2008, the Board approved a PTP Amendment to purchase new replacement vehicles.

On March 31, 2009, the County issued a solicitation (RFP No. 654) for a base purchase of 144 new heavy rail vehicles to replace the existing fleet. The County included two significant standard industry practices during development of the solicitation: 1) a comprehensive Peer Review of the solicitation prior to issuing the RFP in which the County invited a panel of transit experts, assembled by the American Public Transportation Association (APTA), to conduct a thorough review of the solicitation documents including a review of the technical provisions, general provisions, and the solicitation and 2) a Value Engineering Study of the technical provisions, which was performed by Lea+Elliott, Inc., an independent engineering consultant and 3) an industry review of the specifications by seven major carbuilders. The Peer Review panel made recommendations regarding contract administration, contractor performance, inspections and reviews, and risk reduction to the County. Specific recommendations focused on indemnification, bonding, insurance, product warranties, management of claims and disputes, and promotion of quality assurance. The Value Engineering Study provided recommendations for improving the technical provisions that would allow proposers to offer vehicles that will be cost effective, energy efficient, improve performance, lower cost of maintenance, and provide maximum reliability and safety.

PROPOSAL EVALUATIONS

Proposals were received from three railcar builders on September 25, 2009: Alstom Transportation Inc., (Alstom), AnsaldoBreda S.p.A, (AnsaldoBreda), and CAF USA, Inc. (CAF). The proposals were evaluated by an Evaluation/Selection Committee who received assistance from a team of technical and commercial experts appointed by the former County Manager. Points were allocated in accordance with the RFP documents as follows:

The RFP required that proposers not exceed a price cap of $2.419 million established by the County for each of the base and option vehicles. Various sections in the RFP conveyed this requirement. Section 1.1 of the RFP notes the consequences of non-compliance with this requirement, "Proposals that include a per unit price in excess of the $2.419 million will be considered non-responsive and will not be considered for award." Additionally, Section 4.5 of the RFP (Price Evaluation) indicates that after the evaluation of commercial and technical proposals, in light of oral presentations, if any, the County will conduct a subjective evaluation of price proposals of those Proposers remaining in the zone of consideration. Proposers were required to submit Form A-7 Affidavit of Miami-Dade County Acknowledgement of Proposed Price, attesting to the Proposer's compliance with the price cap. The information on Form A-7 submitted by Alstom resulted in uncertainty regarding Alstom's responsiveness to the County's price cap requirement.

The County requested clarification from Alstom of its Form A-7 submission and received a response that did not clearly state if the price cap was met as required by the RFP. Based on the legal opinion rendered by the County Attorney’s Office (attached), Alstom’s commercial and technical proposals were evaluated, but its price proposal was not considered once it was determined to be non-responsive. In its May 18, 2010 letter to the County, Alstom formally requested return of its Proposal Guarantee Deposit, removing itself from consideration for contract award in accordance with RFP Section 1.3.2.

The Evaluation/Selection Committee completed its evaluation and scoring of the proposals on March 15, 2010. The final composite score for each proposer is detailed below.

The County Manager at the time approved the Evaluation/Selection Committee’s recommendation that the County enter into negotiations with the two proposers remaining in the zone of consideration (AnsaldoBreda and CAF). The memorandum also approved a four member negotiations committee. Negotiations commenced on June 2, 2010.
The FTA, through its Best Practices Manual, encourages agencies to visit the facilities of proposers prior to award, to assess their capabilities to meet the requirements for vehicle production. During the week of August 1, 2010, County staff visited the proposed final assembly facility of CAF in Elmira, New York. During the visit, CAF advised of its intention to take advantage of the large rail car manufacturing labor pool in the region. This labor pool, along with CAF’s staff, provides the human resources necessary to assemble and deliver the vehicles. County staff also visited AnsaldoBreda’s existing vehicle final assembly facility in Pittsburg, California. The Pittsburg facility will be used to assemble the six pilot cars and serves as a model for the vehicle final assembly facility to be constructed in Miami-Dade County. County staff concluded that both firms have the capacity to complete final assembly of the vehicles.

On August 9, 2010, Best and Final Offers (BAFO) for price were received from the two proposers. BAFO prices were as follows:
* AnsaldoBreda $ 298,887,200 or $2,197,700 per car
* CAF USA, Inc $ 303,566,408 or $2,232,106 per car

AnsaldoBreda’s BAFO price of $298,887,200 represents a reduction of $30,096,800 when compared to the County’s price cap of $328,984,000 ($2,419,000 per vehicle). AnsaldoBreda’s BAFO price is $4,679,208 less than the CAF BAFO price.

The Negotiations Team met on August 10, 2010 to consider BAFOs and to carefully review and evaluate which competitive offer represented the best value. In determining best value, the Negotiations Team considered FTA procurement guidelines and County procurement policies.
The FTA specifically states, “The recipient should base its determination of which proposal represents the “best value” on an analysis of the tradeoff of qualitative technical factors and price or cost factors.” The County considered qualitative factors such as the proposer’s technical design, technical approach, length of delivery schedule, quality of proposed personnel, past performance, technical and commercial offerings, and management plan.
County staff negotiated offers with both proposers that met the requirements of the RFP. County staff also negotiated significant technical enhancements and commercial terms into each agreement. The County sent each proposer a list of technical enhancements that were discussed during negotiations. The list was customized to the particular proposer based on discussions during negotiations of their specific offer. In its BAFO to the County, each proposer returned its list, indicating if a particular item would be included in its final offer to the County under the price cap. AnsaldoBreda and CAF offered similar enhancements in their offers. For example, both proposers offered bicycle racks, Baultar flooring, a full operator’s cab in the second car of the married pair, Mitsubishi roof mounted HVAC system, LED lighting, WiFi Wireless connectivity, the latest mobile communications connectivity at the time of assembly, an integrated passenger information system, a simulator for operator training, and a 5-year vehicle warranty. Additionally, AnsaldoBreda’s offer included animated air and electronic schematics that will be used as a training aid by Transit staff for orientation, and repair of the new vehicles. This item was not offered by CAF.

BEST VALUE

In making a determination of best value, the County considered a) the negotiated technical provisions, b) the negotiated terms and conditions, c) the BAFO prices, and d) the items on the list of enhancements each proposer submitted to the County. Based on these factors, the County determined that the offer from AnsaldoBreda represents the best value, and as such is most advantageous to the County. The AnsaldoBreda offer is compliant with all of the RFP requirements, offers several significant technical enhancements and favorable commercial terms, and was the lowest priced. FTA Circular 4220.1F outlines third party contracting requirements of the FTA in the procurement process. FTA guidelines state in part, “The evaluation factors for a specific procurement should reflect the subject matter and the elements that are most important to the recipient.” These procedures, include guidance regarding determination of best value were communicated to County staff during the August 10, 2010 negotiation meeting.
The recommended negotiated contract with AnsaldoBreda includes a number of provisions that reduces the County’s risk and enhances contract administration. A performance bond that spans the scope of the work, and ranges from 12% to 30% of the contract amount depending on the level of the County’s exposure is included. The performance bond requires various levels of coverage commensurate with the work effort.

The levels of coverage increase and decrease as work progresses through various phases. For example, the performance bond requirement starts at contract award at 12% of the contract sum, increases to 25% of the contract sum as the work progresses to completion of the final design review through delivery of the first three married pairs also called pilot vehicles (2 vehicles per married pair), and completion of testing. The bond coverage peaks at 30% of the contract sum, and starts to decline at a rate of 1/68 upon acceptance of each married pair. This bond structure serves to reduce cost while maintaining the coverage required for the work being performed. Additionally, the contract includes liquidated damages of $1,653 per day per married pair (two vehicles permanently connected), based on the delivery of vehicles in the contract schedule. As added financial protection, a payment bond in the amount of 2% ($5,977,744) is required, and a milestone payment of 3% ($8,966,616) will be held by the County until the end of the vehicle warranty. The contract also includes a number of general provisions to support effective contract administration.

These include the ability to stop work, suspend work, approve Contractor personnel, and make changes. These provisions provide essential controls to managing the Contractor’s performance and adherence to the contract schedule.

On February 18, 2011, the former County Manager signed an award recommendation for AnsaldoBreda. On February 24, 2011, CAF filed a timely Intent to Protest, followed on March 1, 2011, by a timely filed protest of the former County Manager’s award recommendation. The protest was heard by a Hearing Examiner on March 14, 2011. The County Manager’s recommendation to award was upheld by the Honorable Judge Phillip Cook, the Hearing Examiner.

On February 25, 2011, the County requested from the FTA a review of AnsaldoBreda’s plan for final assembly in-plant testing, and the plan’s compliance with FTA Buy America requirements. On April 2, 2012, the FTA concluded that the approach outlined by AnsaldoBreda for final assembly in-plant testing of the county’s new rail vehicles will comply with the Buy America minimum final assembly requirements outlined in Appendix D to 49 C.F.R. 661.11.

On March 24, 2011, CAF filed a Protest Appeal with the FTA, asserting that the County did not comply with the FTA procurement rules by considering a local vehicle final assembly facility proposed by AnsaldoBreda, local jobs, and the impact on the local economy. On July 14, 2011, the FTA notified the County of its intent to consider the protest submitted by CAF. In its decision dated November 23, 2011, FTA stated that based on its review of the record, including documents and arguments submitted by MDT, CAF, and AnsaldoBreda, the County did not follow Federal procurement requirements when it considered the location of the final assembly facility as an evaluation selection factor without specifically including this factor in the RFP, and when it considered local geographic preference as a selection factor. The FTA recommended that MDT reevaluate the proposers’ Best and Final Offers without considering local preference, the effect of a local assembly facility on the local economy, or the potential project cost savings based upon the location of the final assembly facility (see attached).

In my November 28, 2011 memorandum to the Board, I rescinded the February 18, 2011 award recommendation by the former County Manager. In consideration of the FTA findings, and consistent with the County Attorney’s Office’s consultations with FTA Counsel, on November 29, 2011, I reconvened the same Committee to re-evaluate the BAFO proposals to comply with FTA’s recommendation.

On December 6, 2011, the Committee re-convened at a publicly noticed meeting and re-evaluated the BAFOs and factors such as the company’s financial capacity, technical offer and capability, delivery capability, testing capabilities, and technical enhancements like animated air schematics. In accordance with the recommendation from the FTA and my directive, the Committee did not consider local preference, the effect of a local assembly facility on the local economy, or the potential project cost savings based upon the location of the final assembly facility. The Committee, after re-evaluating the BAFOs, forwarded an award recommendation for AnsaldoBreda (see Committee Report attached).

A majority of the Committee members found that the two offers were comparable from a technical standpoint, and that AnsaldoBreda’s BAFO was $4.6 million less than the BAFO from CAF, which led the Committee to recommend AnsaldoBreda.

DUE DILIGENCE

During negotiations, the past performance of AnsaldoBreda and CAF was reviewed in detail by County staff. Staff conferred directly with other transit agencies, conducted internet and market research, reviewed financials and legal reports for AnsaldoBreda and CAF and held discussions with both railcar builders regarding their past performance. In particular, the Evaluation/Selection Committee (Committee), during the evaluation process, considered the reference from Los Angeles County Metropolitan Transportation Authority regarding product and management services. The results of these efforts were discussed with the Negotiations Team at the August 10, 2010 meeting. The Negotiations Team weighed the information and findings in making a decision regarding each proposer’s ability to perform the work required by the solicitation, including its ability to deliver the vehicles in accordance with the negotiated schedule.

AnsaldoBreda is fully owned by Finmeccanica S.p.A., Italy’s largest manufacturing investor in high technology products with approximately 73,400 employees, and is Italy’s second largest manufacturing group with approximately $21.5 billion in revenues, and orders of $61.5 billion. More than 60% of Finmeccanica’s shares are publicly traded on the Milan Stock Exchange with the remaining shares owned by the Italian Ministry of Economics and Finance. AnsaldoBreda has built and delivered heavy rail vehicles for agencies in Italy and Spain for over 30 years. They have supplied complete rail systems and manufactured transit vehicles for over 150 years. AnsaldoBreda has built and delivered heavy rail transit vehicles for the following United States transit agencies:

County staff conducted extensive reviews to determine the proposer’s responsibility with specific focus on its capability from a commercial and logistical standpoint to perform and manage the County contract. Staff has reviewed information from several recognized sources, including Dunn & Bradstreet reports; a risk analysis indication of the proposers’ business practices regarding how they meet financial obligations, and their payment practices compared to other companies in the rail industry. Staff also reviewed PACER (Public Access to Court Electronic Records) reports to determine if there was any pending litigation for either company. PACER reports show that neither company had a match for pending litigation. Staff reviewed the federal Excluded Parties List System to determine if either company is excluded from participating on federal contracts. Reports were run on countries in which AnsaldoBreda is registered as a foreign corporation and doing business: U.S., France, Norway, Denmark, Greece, Spain, Taiwan, and Morocco. Reports show that AnsaldoBreda is not excluded from participating on federal contracts.

The company is not listed on the State of Florida Suspended Vendor List. Finally, staff ran reports from existing County systems, including the Finance Department’s Delinquent Vendor List, and the County’s Debarred Contractors List. Neither company was listed on either report. AnsaldoBreda is a registered County vendor and is registered in active status with the State of Florida.

The County also reviewed the circumstances surrounding the Metropolitan Transit Authority of Harris County, Texas (Houston METRO) solicitation in which the FTA, in its October 1, 2010 letter to CAF, upheld its September 7, 2010 decision, finding that Houston METRO violated FTA's procurement rules, and that Houston METRO and CAF violated FTA's Buy America requirements.

County staff reviewed newspaper articles regarding AnsaldoBreda’s performance on contracts in Los Angeles, Buffalo, Cleveland, San Francisco, Boston, Chicago, Washington, DC, the Netherlands, Denmark, and Norway. These articles report delivery delays and performance issues with vehicles provided by AnsaldoBreda. Staff also reviewed November and December 2010 news articles surrounding the AnsaldoBreda contract with the Niagara Frontier Transportation Authority (NFTA), in which 27 subway cars are to be refurbished for the Buffalo, New York subway system.

As a result of media based information regarding the NFTA contract in Buffalo, New York, staff conducted a detailed review of the circumstances surrounding AnsaldoBreda’s performance on the rail rehabilitation project. A publicly noticed meeting was held with AnsaldoBreda’s top US officials on January 13, 2011 in Miami. Senior management staff of Miami-Dade Transit and Procurement Management Services, as well as the County Attorney’s Office discussed with AnsaldoBreda the news reports, along with a number of capacity and performance matters. Staff has reviewed documents received from NFTA in regard to the historical data surrounding the contract and its current status, reviewed references for various properties that have been the beneficiaries of new rail and rehab rail procurements with AnsaldoBreda, as well as financial and legal reports. A thorough examination of documentation, including the NFTA contract with AnsaldoBreda, and documents received from NFTA depicting related communications between NFTA and AnsaldoBreda has taken place. A review of AnsaldoBreda’s track record was considered, along with other information collected during the solicitation process, to determine the firm’s responsibility (integrity and capacity) to successfully carry out the Miami-Dade County rail contract requirements.

Since a significant amount of time has passed since the responsibility review was performed for the initial recommendation of this contract, County staff conducted another comprehensive responsibility review of AnsaldoBreda after the re-evaluation of BAFOs on December 6, 2011 Sources like Dunn and Bradstreet, PACER (Public Access to Court Electronic Records), federal Excluded Parties List System, and the State of Florida Suspended Vendor List were checked. Staff also ran reports from existing County systems, including: the Finance Department’s Delinquent Vendor List, and the County’s Debarred Contractors List.

On December 28, 2011, another publicly noticed responsibility review meeting was held with top executives from AnsaldoBreda to discuss the firm’s financial and technical capacity, including its plants and workload, administrative support, and testing capability to meet its contractual obligations. The County was also able to obtain updates on projects that raised concerns during the initial responsibility review. Mike Bykowski, Director of Engineering for the NFTA in Buffalo, New York reports that the contract with AnsaldoBreda is proceeding well. Initially, NFTA asked AnsaldoBreda to subcontract out some of the assembly work to local firms. This approach was not successful and resulted in AnsaldoBreda subsequently assuming full responsibility for carrying out the project scope without the local subcontractors. The foregoing was done with NFTA’s concurrence and the use AnsaldoBreda’s own staff to complete the work. Director Bykowski stated that since AnsaldoBreda changed Project Managers, communications between NFTA and AnsaldoBreda’s staff members are positive, AnsaldoBreda’s staff is responsive to requests and inquiries, work to start vehicle deliveries is on schedule, and the project is moving in the right direction. The director reports that the previous issues with the subcontractors are resolved, as AnsaldoBreda’s staff has taken over the work.

Additionally, AnsaldoBreda demonstrated that all its engineering, manufacturing and production facilities are capable of managing the Miami-Dade contract. Plant workload layouts provided detail regarding current workload and showed sufficient plant capacity when the Miami-Dade project was included. Staff determined there are no issues of concern and that AnsaldoBreda is fully capable of meeting the financial, logistical and technical requirements of the contract. AnsaldoBreda continues to hold its BAFO price, and has re-stated its commitment to all contract obligations should it be awarded a contract by the Board.

The second responsibility review determined that AnsaldoBreda continues to be backed financially by its parent company Finmeccanica, a viable financial firm whose revenues exceeded $26 billion in 2010, with over $68.6 billion in order backlog, $31.6 billion in new orders, and has generated over $3 billion in sales since entering the U.S. market in 1978. In 2011, Finmeccanica reported total assets of $43.8 billion. AnsaldoBreda in the United States is headquartered in California. In addition to the Washington, D.C., Atlanta, and Los Angeles contracts, in 2011 AnsaldoBreda contracted with: Honolulu to supply 80 new driverless light rail vehicles (LRVs); Milan, Italy for 30 heavy rail vehicles (HRV), 36 driverless LRVs and 188 driverless LRVs; Copenhagen, Denmark for 84 driverless LRVs; and Genoa, Italy for 28 cars (LRVs).

Subsequent to my November 28, 2011 memorandum to the Board, I reviewed correspondence from a representative of CAF which maintained that the approximately $4.67 million in savings from the AnsaldoBreda proposal was improperly calculated. CAF asserts that its total proposal cost using FTA “best value” guidelines actually amounts to a savings of almost $17 million making its proposal best value because its overall cost to the County is lower. CAF asserted that a best value determination, which would include consideration of the cost of a test track, quality control efforts by the County, the County’s consultant, and the use of a test track by the recommended firm, yields a higher price for the recommended carbuilder. The chart below compares the costs, as determined by the County to the costs detailed in the CAF letters. The figures clearly show that the difference in the price from CAF is not overcome by any higher costs resulting from the CAF best value analysis.

3
ESTIMATED MDT PERSONNEL $2,335,278
$1,535,885
$410,000
$404,870
TRAVEL
4
BUILDING PROPOSED COUNTY $16,800,000
$0
$0
TEST TRACK TO BE USED BY
ANSALDOBREDA
5
USE OF COUNTY TEST TRACK $1,250,000 $0
$0
BY ANSALDOBREDA FOR
PRE-DELIVERY TESTING
TOTAL COST TO
MIAMI-DADE COUNTY
$328,715,076
$311,886,530
$308,739,799
$312,773,222

I find CAF’s assertions unpersuasive. Specifically, approximately $18 million of the savings CAF claims is related to the construction of the test track. This test track must be built regardless of which of the two firms is awarded; and therefore, a proposer cannot legitimately claim a savings to the County based on the construction or use of the test track.

CAF also claims oversight and travel expenses for AnsaldoBreda (lines 2 plus 3 in the table above) are roughly $3.45 million more than CAF’s. This figure is inaccurate. The amount shown on line 3 as MDT personnel travel for AnsaldoBreda in CAF’s letter ($2,335,278) was the estimated consultant travel cost already included in the line 2 total of $9,442,598. Travel estimate for MDT personnel was $410,000. The MDT personnel travel cost of $1,535,885 in CAF’s letter was developed by CAF. Moreover, my direction to staff and the Committee to pursue strict adherence to FTA guidance and recommendations rendered a decision that excluded the consideration of travel expenses associated with oversight as it was not an evaluation factor stated in the RFP. However, even if I were to consider such travel expenses, I would strongly recommend AnsaldoBreda for this contract award as it offers the best value to Miami-Dade County and the taxpayers we serve.

It is recommended that the Board of County Commissioners (Board) approve award of this contract to AnsaldoBreda S.p.A (AnsaldoBreda) for purchase of 136 new Metrorail replacement vehicles and the decommissioning of the old fleet. The vehicles will be designed and built by AnsaldoBreda to provide 30 years of useful life to the County. The contract is compliant with the commercial and technical requirements of the Request for Proposals (RFP) and all applicable federal requirements.

Fiscal Impact
The total required funding for this contract is $313,832,000, inclusive of a 5% contingency allowance of $14,944,800. Total Project funding, including this contract, project management, oversight and other support costs is $375,746,000. This amount is $25,705,000 less than the not to exceed ceiling of $401,451,000 for total project costs approved by the Board through Resolution R-488-08 on May 6, 2008. The $375,746,000 will be funded through the issuance of Transit System Sales Surtax Revenue Bonds. Net Transit System Sales Surtax revenues will be the sole pledge for repayment of the bonds. The Bond Ordinance and corresponding Series Resolution authorizing the Bonds was approved by the Board on June 5, 2012.

Background/Solicitation Process
On March 31, 2009, the County issued a solicitation (RFP No. 654) for the purchase of new heavy rail vehicles to replace the existing fleet. The solicitation included a price cap of $2.419 million per vehicle. The County included two Federal Transit Administration (FTA) required practices, and an industry recommended practice during development of the solicitation: 1) a comprehensive Peer Review (FTA) of the solicitation prior to issuing the RFP in which the County invited a panel of transit experts, assembled by the American Public Transit Association (APTA), to conduct a thorough review of the solicitation documents, 2) a Value Engineering Study (FTA/MDC) of the technical provisions performed by Lea+Elliott, Inc., an independent engineering consultant and 3) an industry review of the specifications by seven major carbuilders. Proposals were received from three rail carbuilders on September 25, 2009: Alstom Transportation Inc., (Alstom), AnsaldoBreda S.p.A, (AnsaldoBreda), and CAF USA, Inc. (CAF). The Alstom proposal was deemed non-responsive by the County Attorney’s Office because the proposal did not meet the price cap requirement. Staff, through evaluations, concluded that AnsaldoBreda S.p.A. and CAF USA, Inc. provided technically compliant proposals. The former County Manager directed staff to conduct negotiations with AnsaldoBreda S.p.A. and CAF USA, Inc. Negotiations commenced on June 2, 2010. During the week of August 1, 2010, County staff visited the final assembly facility of CAF in Elmira, New York, and AnsaldoBreda’s vehicle final assembly facility in Pittsburg, California. The Pittsburg facility will be used to assemble the six pilot vehicles and serves as a model for the vehicle final assembly facility to be constructed in Miami-Dade County. On August 9, 2010, Best and Final Offers (BAFO) for price were received from the two proposers. BAFO prices were as follows:

AnsaldoBreda’s BAFO price represents a reduction of $30,096,800 when compared to the County’s price cap of $328,984,000. AnsaldoBreda’s BAFO price is $4,679,208 less than the CAF BAFO price. The Negotiations Team met on August 10, 2010 to consider the BAFOs and to carefully review and evaluate which competitive offer represented the best value to the County. On February 18, 2011, the former County Manager signed an award recommendation for AnsaldoBreda. On February 24, 2011, CAF filed a protest of the former County Manager’s award recommendation. The protest was heard on March 14, 2011 by a Hearing Examiner, the Honorable Judge Phillip Cook, who upheld the County Manager’s recommendation to award to AnsaldoBreda.

On March 24, 2011, CAF filed an appeal with the FTA, asserting that the County did not comply with FTA procurement rules by considering a local vehicle final assembly facility proposed by AnsaldoBreda, local jobs, and the impact on the local economy. In its decision dated November 23, 2011, FTA stated that the County did not comply with Federal procurement requirements as FTA concluded the County considered the location of the final assembly facility as an evaluation selection factor without specifically including this factor in the RFP, and FTA also concluded the County considered local geographic preference as a selection factor. The FTA recommended that MDT reevaluate the proposers’ BAFOs without considering local preference, the effect of a local assembly facility on the local economy, or the potential project cost savings based upon the location of the final assembly facility. The Mayor sent a November 28, 2011 memorandum to the Board, rescinding the February 18, 2011 award recommendation by the former County Manager. On November 29, 2011, the Mayor directed that the Committee be reconvened to reevaluate the BAFO proposals, and comply with the FTA’s opinion. On December 6, 2011, the Committee reconvened, at a publicly noticed meeting, and reevaluated the BAFOs. The Committee concluded that the offer from AnsaldoBreda represents the best value to the county.

Due Diligence
Staff reviewed information from several recognized sources, including review of Dunn & Bradstreet reports, PACER (Public Access to Court Electronic Records) to determine if there was any pending litigation, Excluded Parties List System to determine if the company is excluded from participating on federal contracts, the State of Florida Suspended Vendor List, and reports from existing County systems, including the Finance Department’s Delinquent Vendor List, and the County’s Debarred Contractors List. Staff also met with AnsaldoBreda to address past performance, production capacity, contract resources, and financial viability. Staff determined there are no issues of concern, and that AnsaldoBreda is fully capable of meeting the financial, logistical and technical requirements of the contract. AnsaldoBreda continues to hold its BAFO price, and has re-stated its commitment to all contract obligations should it be awarded a contract by the Board.